(Update to early afternoon)
* Higher oil prices stir profit worries
* Big manufacturers, techs, financials lead declines
* Dow on the cusp of bear market
* Ford slides on June sales slump; GM also lower
By Deborah Jian Lee
NEW YORK, July 1 (Reuters) - U.S. stocks fell on Tuesday,
putting the Dow on the cusp of a bear market, as high oil
prices dragged down U.S. car sales while tough credit
conditions threatened the financial sector.
Shares of automakers slid following reports of a June sales
slide, with Ford Motor Co <F.N> down almost 7 percent.
Declines were widespread, but shares of financial services
companies, big manufacturers, miners and technology companies
took most of the beating as concerns about the economy grew.
Shares of aluminum producer Alcoa Inc <AA.N> fell more than
5 percent, and was the Dow's top drag, while software maker
Microsoft Corp <MSFT.O>, down more than 3 percent, weighed on
the S&P 500.
Among financial shares, shares of Bank of America Corp
<BAC.N>, the No. 2 U.S. bank, fell more than 4 percent, while
shares of JPMorgan Chase & Co <JPM.N>, the No. 3 U.S. bank,
declined almost 4 percent. Shares of Citigroup <C.N>, the No. 1
U.S. bank, were down nearly 2 percent.
"Oil is a problem," said Chip Hanlon, president of Delta
Global Advisors, Inc. in Huntington Beach, California. He said
a report showing a modest improvement in manufacturing "is not
strong enough to mitigate everybody's fear."
An unexpected rise in the Institute for Supply Management's
manufacturing index for June helped to temper some of the
worries, but gains were short-lived.
"I would not trust any rally from here. A lot of people are
calling for a rally to start soon. I personally wouldn't trust
any bounce that started from here," Hanlon said.
The Dow Jones industrial average <> fell 149.24 points,
or 1.31 percent, to 11,200.77. The Standard & Poor's 500 Index
<.SPX> declined 16.14 points, or 1.26 percent, to 1,263.86. The
Nasdaq Composite Index <> slid 29.91 points, or 1.30
percent, to 2,263.07.
The Dow could officially enter a bear market if it closes
down 20 percent below its record finish set last October.
U.S. front-month crude <CLc1> rose $2.16 to $142.15 on the
New York Mercantile Exchange, a day after it hit an intraday
record of $143.67 a barrel.
Alcoa shares fell to $33.49 on the New York Stock Exchange.
Analysts cited concerns that rising costs of raw materials
would hurt the the company's margins.
Among financials, shares of Bank of America fell to $22.91,
while JPMorgan Chase dropped to $32.80. Shares of Citigroup
fell to $16.47. The KBW bank index <.BKX> fell almost 2
percent.
On the Nasdaq, shares of Microsoft led losers, falling to
$26.63.
Ford shares tumbled to $4.49 on the NYSE after the
automaker posted a 28 percent slide in June sales as soaring
gasoline prices cut demand for trucks and SUVs. Shares of
General Motors <GM.N>, which was yet to report its sales, fell
6.4 percent to $10.76. []
On a positive note, shares of commercial lender CIT Group
Inc <CIT.N> skyrocketed more than 14 percent to $7.78 after the
company said agreed to sell its home lending business and other
housing portfolio holdings.
(Additional reporting by Ellis Mnyandu; Editing by Kenneth
Barry)
